The McKinsey Quarterly has a very interesting article (note: registration required) on the global financial markets:

The McKinsey Global Institute (MGI) has conducted a yearlong research effort on the world’s financial markets and created a comprehensive database of the financial assets of more than 100 countries since 1980. Together, these assets make up the global financial stock.

This research yielded several notable observations. One of them is simply that global capital markets are huge: we calculate that the world’s financial assets now total more than $118 trillion and will exceed $200 trillion by 2010 if current trends persist. The stock of global financial assets has grown faster than the world’s GDP, indicating that financial markets are becoming deeper and more liquid. With a few qualifications, this trend bodes well for the world’s economies, since deeper markets provide better access to capital and improve the allocation of risk.

This supports my gut feel that many markets are awash in money, as evidenced by larger and larger VC deals, and boom-era valuations for some companies. 😉

Udhay Shankar N

Udhay is a veteran of the technology and entrepreneurship scene, having helped found his first entrepreneurial venture straight out of college in 1991. Since then, he has been invoved in various pioneering ventures,
including (among other things) India's first web site company (in 1995), and India's first startup to get silicon valley venture capital funding (in 1999). He has helped build Yahoo!'s first social media network (before facebook existed) and was recently helping Intel build new products for the Indian consumer. In addition, he set up and ran the startup accelerator at the VC fund, Axilor Ventures, and spends a lot of time helping startups of various kinds further refine their product and strategy.

He is also the force behind the well-known discussion group silklist, since 1997, which makes it one of the longer-lived email lists on the net. Discussions on silklist have ended up inspiring articles, books, Ph.D theses, and sociological studies. Recently, he helped found the 'unconference' styled event, The Goa Project, which aims to bring interesting people of all types together to learn and collaborate..

More info about Udhay on Linkedin.